Mortgage Clauses
LAND AND CONVEYANCING LAW REFORM ACT 2009
AN ACT TO PROVIDE FOR THE REFORM AND MODERNISATION OF LAND LAW AND CONVEYANCING, TO REPEAL ENACTMENTS THAT ARE OBSOLETE, UNNECESSARY OR OF NO BENEFIT IN MODERN CIRCUMSTANCES, TO PROVIDE FOR THE VARIATION OF TRUSTS, TO MODERNISE THE LAW RELATING TO LIS PENDENS, TO AMEND THE REGISTRATION OF DEEDS AND TITLE ACTS 1964 AND 2006 AND CERTAIN OTHER ENACTMENTS AND FOR RELATED MATTERS.
[21st July, 2009]
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
PART 1
Preliminary and General
Short title.
1.— This Act may be cited as the Land and Conveyancing Law Reform Act 2009.
Commencement.
2.— This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes and different provisions.
Interpretation generally.
3.— In this Act, unless the context otherwise requires—
“ Act of 1957 ” means the Statute of Limitations 1957;
“ Act of 1963 ” means the Companies Act 1963;
“ Act of 1964 ” means the Registration of Title Act 1964 ;
“ Act of 1965 ” means the Succession Act 1965 ;
“Act of 1976” means the Family Home Protection Act 1976 ;
“Act of 1988” means the Bankruptcy Act 1988 ;
“Act of 1989” means the Building Societies Act 1989 ;
“Act of 1995” means the Family Law Act 1995 ;
“Act of 1996” means the Family Law (Divorce) Act 1996 ;
“Act of 2000” means the Planning and Development Act 2000 ;
“Act of 2005” means the Interpretation Act 2005 ;
“Act of 2006” means the Registration of Deeds and Title Act 2006 ;
“assent” has the meaning given to it by section 53 of the Act of 1965;
“consent” includes agreement, licence and permission;
“conveyance” includes an appointment, assent, assignment, charge, disclaimer, lease, mortgage, release, surrender, transfer, vesting certificate, vesting declaration, vesting order and every other assurance by way of instrument except a will; and “convey” shall be read accordingly;
“ the court ” means—
(a) the High Court, or
(b) the Circuit Court when exercising the jurisdiction conferred on it by the Third Schedule to the Courts (Supplemental Provisions) Act 1961;
“covenant” includes an agreement, a condition, reservation and stipulation;
“deed” has the meaning given to it by section 64 (2);
“development” has the meaning given to it by section 3 of the Act of 2000;
“development plan” has the meaning given to it by section 3(1) of the Act of 2000;
“disposition” includes a conveyance and a devise, bequest or appointment of property by will and “ dispose” shall be read accordingly;
“exempted development” has the meaning given to it by section 4 of the Act of 2000;
“fee farm grant” means any—
(a) grant of a fee simple, or
(b) lease for ever or in perpetuity,
reserving or charging a perpetual rent, whether or not the relationship of landlord and tenant is created between the grantor and grantee, and includes a sub-fee farm grant;
“freehold covenant” has the meaning given to it by section 48 ;
“ freehold estate ” has the meaning given to it by section 11 (2);
“housing loan” has the meaning given to it by section 2 (1) of the Consumer Credit Act 1995 , as substituted by section 33 of, and Part 12 of Schedule 3 to, the Central Bank and Financial Services Authority of Ireland Act 2004 and “housing loan mortgage” means a mortgage to secure a housing loan;
“incumbrance” includes an annuity, charge, lien, mortgage, portion and trust for securing an annual or capital sum; and “incumbrancer” shall be read accordingly and includes every person entitled to the benefit of an incumbrance or to require its payment or discharge;
“instrument” includes a deed, will, or other document in writing, and information in electronic or other non-legible form which is capable of being converted into such a document, but not a statutory provision;
“judgment mortgage” means a mortgage registered by a creditor under section 116 ;
“land” includes—
(a) any estate or interest in or over land, whether corporeal or incorporeal,
(b) mines, minerals and other substances in the substratum below the surface, whether or not owned in horizontal, vertical or other layers apart from the surface of the land,
(c) land covered by water,
(d) buildings or structures of any kind on land and any part of them, whether the division is made horizontally, vertically or in any other way,
(e) the airspace above the surface of land or above any building or structure on land which is capable of being or was previously occupied by a building or structure and any part of such airspace, whether the division is made horizontally, vertically or in any other way,
(f) any part of land;
“ Land Registry ” has the meaning given to it by section 7 of the Act of 1964;
“ landlord ” means the person, including a sublandlord, entitled to the legal estate immediately superior to a tenancy;
“ lease ” as a noun means an instrument creating a tenancy; and as a verb means the granting of a tenancy by an instrument;
“ legal estate ” has the meaning given to it by section 11 (1);
“ legal interest ” has the meaning given to it by section 11 (4);
“ lessee ” means the person, including a sublessee, in whom a tenancy created by a lease is vested;
“ lessor ” means the person, including a sublessor, entitled to the legal estate immediately superior to a tenancy created by a lease;
“ Minister ” means the Minister for Justice, Equality and Law Reform;
“ mortgage ” includes any charge or lien on any property for securing money or money’s worth;
“ mortgagee ” includes any person having the benefit of a charge or lien and any person deriving title to the mortgage under the original mortgagee;
“ mortgagor ” includes any person deriving title to the mortgaged property under the original mortgagor or entitled to redeem the mortgage;
“ notice ” includes constructive notice;
“ personal representative ” means the executor or executrix or the administrator or administratrix for the time being of a deceased person;
“ planning permission ” means permission required under Part III of the Act of 2000;
“ possession ” includes the receipt of, or the right to receive, rent and profits, if any;
“ prescribed ” means prescribed by regulations made under section 5 ;
“ property ” means any real or personal property or any part or combination of such property;
“Property Registration Authority” has the meaning given to it by section 9 of the Act of 2006;
“purchaser” means an assignee, chargeant, grantee, lessee, mortgagee or other person who acquires land for valuable consideration; and “purchase” shall be read accordingly;
“ registered land ” has the meaning given to it by section 3(1) of the Act of 1964;
“Registry of Deeds” has the meaning given to it by section 33 of the Act of 2006;
“ rent ” includes a rent payable under a tenancy or a rentcharge, or other payment in money or money’s worth or any other consideration, reserved or issuing out of or charged on land, but does not include interest;
“ rentcharge ” means any annual or periodic sum charged on or issuing out of land, except—
(a) a rent payable under a tenancy, and
(b) interest;
“ right of entry ” means a right to take possession of land or of its income and to retain that possession or income until some obligation is performed;
“ right of re – entry ” means a right to forfeit the legal owner’s estate in the land;
“ strict settlement” has the meaning given to it by section 18 (1)(a);
“ subtenancy ” includes a sub-subtenancy; and a “ subtenant ” shall be read accordingly;
“ tenancy ” means the estate or interest which arises from the relationship of landlord and tenant however it is created but does not include a tenancy at will or at sufferance;
“ tenant ” means the person, including a subtenant, in whom a tenancy is vested;
“ trust corporation ” has the meaning given to it by section 30(4) of the Act of 1965;
“ trust of land ” has the meaning given to it by section 18 (1);
“ unregistered land ” has the meaning given to it by section 3(1) of the Act of 1964;
“ valuable consideration ” does not include marriage or a nominal consideration in money;
“ will ” includes codicil.
Service of notices.
[CA 1881, s. 67]
4.— (1) A notice authorised or required to be given or served by or under this Act shall, subject to subsection (2), be addressed to the person concerned by name and may be given to or served on the person in one of the following ways:
(a) by delivering it to the person; or
(b) by leaving it at the address at which the person ordinarily resides or, in a case in which an address for service has been furnished, at that address; or
(c) by sending it by post in a prepaid letter to the address at which the person ordinarily resides or, in a case in which an address for service has been furnished, to that address; or
(d) where the notice relates to a building with which the person is associated, and it appears that no person is in actual occupation of the building, by affixing it in a conspicuous position on the outside of the building or the property containing the building; or
(e) if the person concerned has agreed to service of notices by means of an electronic communication (within the meaning given to it by section 2 of the Electronic Commerce Act 2000) to that person (being an addressee within the meaning given to it by that section) and provided that there is a facility to confirm receipt of electronic mail and that such receipt has been confirmed, then by that means; or
(f) by sending it by means of a facsimile machine to a device or facility for the reception of facsimiles located at the address at which the person ordinarily resides or carries on business or, if an address for the service of notices has been furnished by the person, that address, provided that the sender’s facsimile machine generates a message confirming successful transmission of the total number of pages of the notice; or
(g) by any other means that may be prescribed.
(2) Where the notice concerned is to be served on or given to a person who is the owner, landlord, tenant or occupier of a building and the name of the person cannot be ascertained by reasonable inquiry it may be addressed to the person at that building by using the words “the owner”, “the landlord”, “the tenant” or “the occupier” or other like description, as the case may require.
(3) For the purposes of this section, a company shall be deemed to be ordinarily resident at its registered office, and every other body corporate and every unincorporated body shall be deemed to be ordinarily resident at its principal office or place of business.
(4) Where a notice required or authorised to be served or given by or under this Act is served or given on behalf of a person, the notice shall be deemed to be served or given by that person.
(5) A person shall not, at any time during the period of 3 months after the notice is affixed under subsection (1)(d), remove, damage or deface the notice without lawful authority.
(6) A person who knowingly contravenes subsection (5) is guilty of an offence.PART 10
Position of mortgagor and mortgagee.
90.— (1) Subject to this Part, where a mortgage is created after the commencement of this Chapter—
(a) the mortgagor has the same powers and rights and the same protection at law and in equity as the mortgagor would have been entitled to,
(b) the mortgagee has the same obligations, powers and rights as the mortgagee would have had,
if the mortgagee’s security had been created by a conveyance before that commencement of the legal estate or interest in the land of the mortgagor.
(2) Without prejudice to the generality of subsection (1)(b) and subject to subsection (3), a first mortgagee has the same right to possession of documents of title as such mortgagee would have had if the security had been created by a conveyance before the commencement of this Chapter.
(3) Notwithstanding any stipulation to the contrary, a mortgagee who retains possession or control of documents of title relating to the mortgaged land is, in addition to being subject to the mortgagor’s rights under section 91 , responsible for their safe custody as if an undertaking for this were given under section 84 .
Chapter 2
Powers and rights of mortgagor
Documents of title.
91.— (1) Subject to subsection (2), a mortgagor, as long as the right to redeem exists, may from time to time, at reasonable times, inspect and make copies or abstracts of or extracts from the documents of title relating to the mortgaged property in the possession or power of the mortgagee.
[CA 1881, s. 16]
(2) Rights under subsection (1) are exercisable—
(a) on the request of the mortgagor, and
(b) on payment by the mortgagor of the mortgagee’s reasonable costs and expenses in relation to the exercise.
(3) Subsection (1) has effect notwithstanding any stipulation to the contrary.
Restriction on consolidation of certain mortgages.
92.— Notwithstanding any stipulation to the contrary, a mortgagor is entitled to redeem any housing loan mortgage without having to pay any money due under any other mortgage with the same mortgagee, whether that other mortgage is of the same or other property.
[CA 1881, s. 17]
Transfer in lieu of discharge.
93.— (1) A mortgagor who is entitled to redeem may, subject to compliance with the terms on which the mortgagor would be entitled to require a discharge, require the mortgagee, instead of discharging the mortgage, to assign the mortgage debt and transfer the mortgage to any third person, as the mortgagor directs, and on the mortgagor so directing, the mortgagee is bound to assign and transfer accordingly.
[CA 1881, s. 15][CA 1882, s. 12]
(2) The rights conferred by subsection (1) belong to and may be enforced by each incumbrancer or the mortgagor notwithstanding any intermediate incumbrance, but a requisition of an incumbrancer prevails over a requisition of the mortgagor and, as between incumbrancers, a requisition of a prior incumbrancer prevails over a requisition of a subsequent incumbrancer.
(3) This section—
(a) does not apply in the case of a mortgagee being or having been in possession,
(b) applies notwithstanding any stipulation to the contrary.
Insurance.
110.— (1) A mortgagee may insure and keep insured any building, effects or other property of an insurable nature, whether affixed to the land or not, which forms part of the mortgaged property.
[CA 1881, ss. 19(1)(ii), 23]
(2) The insurance shall be for the full reinstatement cost of repairing any loss or damage arising from fire, flood, storm, tempest or other perils commonly covered by a policy of comprehensive insurance.
(3) The mortgagee may give a good discharge for any money payable under any such insurance, but, subject to subsection (4), so much of such money as exceeds the mortgage debt shall be dealt with by the mortgagee as if it were the proceeds of a sale of the mortgaged property.
(4) The mortgagee may require any money received under such or other insurance of the mortgaged property to be applied—
(a) by the mortgagor in making good loss or damage covered by the insurance, or
(b) in or towards the discharge of the mortgage debt.
Future advances.
111.— (1) Where a mortgage is expressed to be created on any land for the purpose of securing future advances (whether with or without present advances), the mortgagee is entitled, in priority to any subsequent mortgage, to the payment of any sum due in respect of any such future advances, except any advances which may have been made after the date of, and with express notice in writing of, the subsequent mortgage.
(2) In subsection (1) “future advances” includes sums from time to time due on a current account and all sums which by agreement or in the course of business between the parties are considered to be advances on the security of the mortgage.
(3) Save in regard to the making of such future advances the right to tack in any form is abolished, but without prejudice to any priority acquired by tacking before the commencement of this Chapter.
(4) This section—
(a) applies to mortgages made before or after the commencement of this Chapter,
(b) does not apply to registered land.
Chapter 4
Leases and surrenders of leases
Leasing powers.
112.— (1) A mortgagor of land, while in possession, may, as against every other incumbrancer, lease the land with the consent in writing of the mortgagee, which consent shall not be unreasonably withheld.
[CA 1881, s. 18][CA 1911, s. 3]
(2) A lease made without such consent is voidable by a mortgagee who establishes that—
(a) the lessee had actual knowledge of the mortgage at the time of the granting of the lease, and
(b) the granting had prejudiced the mortgagee.
(3) A mortgagee of land while in possession or, after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver, may, as against all prior incumbrancers, if any, and the mortgagor, lease the land provided—
(a) it is for the purpose of—
(i) preserving the value of the land, or
(ii) protection of the mortgagee’s security, or
(iii) raising income to pay interest due under the mortgage or otherwise reduce the debt,
or
(b) it is otherwise an appropriate use of the land pending its sale, or
(c) the mortgagor consents in writing, or
(d) the court in any action relating to the mortgaged land makes an order permitting such lease.
(4) In this section “ mortgagor” does not include an incumbrancer deriving title from or under the original mortgagor.
(5) The power of leasing conferred by this section applies only to mortgages created after the commencement of this Part.
Exercise of leasing powers.
113.— (1) A lease to be granted under section 112 shall—
(a) reserve the best rent which can reasonably be obtained, taking into account any premium or other capital sum paid by the lessee and other relevant circumstances, and
(b) be otherwise granted on the best terms that can reasonably be obtained and accord with good commercial practice,
and execution of the lease by the lessor shall be sufficient evidence of execution and delivery of the lease.
(2) A purported lease which fails to comply with subsection (1) is void.
(3) A duplicate of a lease granted in accordance with subsection (1) shall be executed by the lessee and delivered to the lessor.
(4) In the case of a lease by the mortgagor, the mortgagor shall, within one month after making the lease, deliver to the mortgagee or, where there are more than one, the mortgagee first in priority, a copy of the lease duly executed by the lessee.
(5) Failure by the mortgagor to comply with subsection (4) does not affect the validity of the lease.
(6) Where a premium or other capital sum is paid by the lessee and the lease is granted by—
(a) the mortgagor, it, or, where it exceeds the mortgage debt, so much of it as is required for the purpose, shall be applied in or towards discharge of that debt, whether or not the date for redemption has arrived,
(b) the mortgagee, it shall be applied in accordance with section 107 as if it comprised the proceeds of a sale.
Surrenders.
114.— (1) Subject to subsection (2), a mortgagor or mortgagee in possession (or after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver) may accept a surrender of a lease previously granted under section 112 or as authorised by the terms of the mortgage, whether the surrender relates to the whole or part only of the land leased.
[CA 1911, s. 3]
(2) Subsection (1) applies only where the surrender of the previous lease is for the purpose of granting a new lease under section 112 or as authorised by the terms of the mortgage.
(3) On such a surrender—
(a) the term of the new lease shall not be less than the unexpired term which would have existed under the surrendered lease if it not been surrendered,
(b) the rent reserved by the new lease shall not be less than the rent which would have been payable under the surrendered lease if it had not been surrendered,
(c) where part only of the land has been surrendered—
(i) the rent reserved by the new lease shall not be less than is required to make the aggregate rents payable under the remaining lease and new lease not less than the rent payable under the surrendered lease if no partial surrender had been accepted, and
(ii) any other modifications of the original lease shall comply with section 113 .
(4) A purported acceptance of a surrender which fails to comply with subsection (3) is void.
(5) Where a surrender involves payment of a premium or consideration other than the agreement to accept surrender, the surrender is void unless, in the case of a surrender—
(a) to the mortgagor, the consent of incumbrancers, or
(b) to a second or subsequent mortgagee, the consent of any prior incumbrancer,
is obtained.